Authored by:
Casper Schouten, Vice President, Teknos Crypto
Joey Ryan, Senior Manager, Digital Assets & Blockchain, CBIZ
Web3 M&A has seen a sharp uptick in 2024 and into 2025, with a wave of consolidation and strategic expansion reshaping the industry. Major players are making bold moves with multiple acquisitions, including Coinbase, Robinhood, Consensys, Kraken, etc., signaling renewed confidence in the long-term trajectory of blockchain infrastructure and digital assets.
CBIZ and Teknos Crypto, have been working closely with some of the acquirers and targets in this space, and one trend is clear: Purchase Price Allocations (PPAs) under ASC 805 are not just a post-deal formality—they are a strategic necessity. As deal structures become increasingly complex and token-driven, and as regulatory and audit scrutiny intensifies, the need for deep industry expertise in conducting these analyses is more important than ever.
What is a Purchase Price Allocation?
A Purchase Price Allocation (PPA) is the process of assigning the total consideration paid in a business combination to the identifiable assets acquired and liabilities assumed, at their fair values, on the acquisition date. This is required under ASC 805 – Business Combinations, which governs how transactions are reported under U.S. GAAP.
The process typically involves:
- Determining the Fair Value of the total purchase price (consideration transferred), including any earn-outs,
- Identifying the tangible and intangible assets and liabilities acquired,
- Valuing those assets and liabilities at fair value, and
- Assigning any residual value to goodwill.
PPAs impact both financial reporting and tax treatment, and inaccuracies can have lasting consequences, including audit challenges, impaired goodwill, or misstated intangible assets.
Why Audit Scrutiny Is Increasing
As crypto companies mature, institutional capital becomes more involved and audit capabilities in the web3 space are ramping up, auditors are taking a closer look at acquisition accounting practices. Over the past year, scrutiny has increased over:
- How token-based consideration is valued and recognized,
- Whether intangible assets are being properly identified and measured, and
- Whether goodwill is justified and appropriately supported.
Audit firms are tightening their internal review processes, and regulators are showing more interest in how digital asset transactions are accounted for—especially when deal structures deviate from traditional norms.
In this climate, a robust, defensible PPA isn’t just best practice, it’s an essential component of audit readiness and financial integrity. Whether you’re the acquirer or acquiree, partnering with an audit firm and valuation specialist experienced in digital assets and accustomed to working together can mean the difference between a smooth review and a prolonged audit.
Why PPAs Are Different in Web3
Web3 companies operate in a landscape defined by token economies, open-source infrastructure, decentralized teams, and unconventional business models. These distinctions make traditional approaches to valuation and purchase price allocation insufficient. Here are a few of the unique considerations that make PPAs in Web3 especially complex:
1. Consideration Paid: Equity, Cash, and Tokens
Unlike traditional tech M&A deals, Web3 transactions often include non-traditional consideration, such as:
- Equity in development companies, that may not generate revenue yet,
- Tokens (fungible or non-fungible),
- Locked or vesting assets,
- Earn-outs denominated in tokens or tied to protocol milestones.
Determining the fair value of tokens on the acquisition date can be complex. It’s essential to consider principal market, liquidity, observable prices and possible transferability restrictions (vesting schedules, lockups, regulatory constraints, etc..). For thinly traded or protocol specific tokens, valuation may require a specialized approach.
Token based earn-outs are increasingly common, and ASC 805 requires contingent consideration to be recognized at fair value at the acquisition date. Consideration should be noted regarding any milestone-triggered vesting, protocol performance metrics, and market price volatility.
In addition, new financial statement presentation and disclosure requirements under ASU 2023-08 require crypto assets to be measured at fair value, including disclosure requirements around rollforwards, methodologies, restrictions, custodial risks, and principal markets. For PPAs, transparency in valuation methods and assumptions are important for financial statement disclosure and potential regulatory filing purposes.
2. Acquihires and Token-Based Incentives
A number of Web3 deals are acquihires, where the primary asset acquired is the development team. In these cases:
- There might be little to no technology or IP transferred,
- Team members often receive tokens as part of their comp,
- The bulk of the consideration may equity in the acquiring company, and have contingencies based on future milestones, not past contributions.
This introduces critical accounting judgments: Which portion of the consideration is compensation (i.e., expensed post-deal) versus attributable to goodwill or identifiable assets? How should token-based awards be measured?
3. Customer and Community Relationships
In Web3, “users” are not always “customers” in the traditional sense. Instead, companies may engage:
- Protocol users and liquidity providers,
- Community members contributing to governance,
- Token holders with economic rights but no contractual obligations.
Evaluating whether these relationships qualify as intangible assets (e.g., customer relationships or assembled workforce) requires a nuanced understanding of tokenomics and protocol governance.
4. IP and Open-Source Technology
Web3 IP is often open-source, which complicates the valuation of developed technology:
- What rights are actually being acquired?
- Is the IP defensible and exclusive?
- Are there token-gated features or off-chain infrastructure that hold proprietary value?
Additionally, IP might reside in a non-U.S. foundation or protocol-level entity, even if the target company contributed to it, raising structural and jurisdictional valuation questions.
5. Intangible Ecosystem Assets
Some Web3 companies bring more than just code—they bring network effects:
- Ecosystem partnerships,
- Validator or node operator relationships,
- DAO voting power or governance influence.
While these may not always qualify as separately identifiable intangibles, they often support the justification for economic goodwill and can impact how the overall purchase price is allocated.
About CBIZ, Inc.
CBIZ, Inc. is a leading professional services advisor to middle market businesses and organizations nationwide. With unmatched industry knowledge and expertise in accounting, tax, advisory, benefits, insurance, and technology, CBIZ delivers forward-thinking insights and actionable solutions to help clients anticipate what’s next and discover new ways to accelerate growth. CBIZ has more than 10,000 team members across more than 160 locations in 22 major markets coast to coast. CBIZ’s Digital Assets & Blockchain Practice partners with companies operating in blockchain, digital currencies, and decentralized finance (DeFi) to provide specialized services. Whether securing investor confidence, ensuring regulatory compliance, or implementing risk controls, our dedicated professionals offer the insights, tools, and strategies necessary to succeed in the digital asset space.
About Teknos Crypto
At Teknos Associates, we’ve worked with token issuers, DeFi protocols, infrastructure providers, exchanges, and DAOs since the early days of the industry. We understand the nuanced realities of token vesting, off-chain entities, protocol monetization, and the evolving accounting guidance that surrounds them.
Whether you’re:
- Acquiring a team of developers via an acquihire,
- Do an acquisition with a mix of stablecoins and vesting governance tokens,
- Consolidating IP through an offshore foundation,
- Or simply trying to determine how to split goodwill and intangible assets on your balance sheet,
we can help you navigate ASC 805 with confidence and audit-ready analysis.
Get in Touch
As Web3 deal activity accelerates and scrutiny from the audit community increases, accurate and defensible PPAs are more important than ever. If you’re planning an acquisition—or have recently closed one—reach out to CBIZ and Teknos Crypto to assist you through a defensible valuation for audit purposes.
Teknos Crypto
Casper Schouten
Vice President
cschouten@teknosassociates.com
CBIZ
Joey Ryan
Senior Manager- Digital Assets & Blockchain
joey.ryan@cbiz.com
Navigating Purchase Price Allocations in Web3
Authored by:
Casper Schouten, Vice President, Teknos Crypto
Joey Ryan, Senior Manager, Digital Assets & Blockchain, CBIZ
Web3 M&A has seen a sharp uptick in 2024 and into 2025, with a wave of consolidation and strategic expansion reshaping the industry. Major players are making bold moves with multiple acquisitions, including Coinbase, Robinhood, Consensys, Kraken, etc., signaling renewed confidence in the long-term trajectory of blockchain infrastructure and digital assets.
CBIZ and Teknos Crypto, have been working closely with some of the acquirers and targets in this space, and one trend is clear: Purchase Price Allocations (PPAs) under ASC 805 are not just a post-deal formality—they are a strategic necessity. As deal structures become increasingly complex and token-driven, and as regulatory and audit scrutiny intensifies, the need for deep industry expertise in conducting these analyses is more important than ever.
What is a Purchase Price Allocation?
A Purchase Price Allocation (PPA) is the process of assigning the total consideration paid in a business combination to the identifiable assets acquired and liabilities assumed, at their fair values, on the acquisition date. This is required under ASC 805 – Business Combinations, which governs how transactions are reported under U.S. GAAP.
The process typically involves:
PPAs impact both financial reporting and tax treatment, and inaccuracies can have lasting consequences, including audit challenges, impaired goodwill, or misstated intangible assets.
Why Audit Scrutiny Is Increasing
As crypto companies mature, institutional capital becomes more involved and audit capabilities in the web3 space are ramping up, auditors are taking a closer look at acquisition accounting practices. Over the past year, scrutiny has increased over:
Audit firms are tightening their internal review processes, and regulators are showing more interest in how digital asset transactions are accounted for—especially when deal structures deviate from traditional norms.
In this climate, a robust, defensible PPA isn’t just best practice, it’s an essential component of audit readiness and financial integrity. Whether you’re the acquirer or acquiree, partnering with an audit firm and valuation specialist experienced in digital assets and accustomed to working together can mean the difference between a smooth review and a prolonged audit.
Why PPAs Are Different in Web3
Web3 companies operate in a landscape defined by token economies, open-source infrastructure, decentralized teams, and unconventional business models. These distinctions make traditional approaches to valuation and purchase price allocation insufficient. Here are a few of the unique considerations that make PPAs in Web3 especially complex:
1. Consideration Paid: Equity, Cash, and Tokens
Unlike traditional tech M&A deals, Web3 transactions often include non-traditional consideration, such as:
Determining the fair value of tokens on the acquisition date can be complex. It’s essential to consider principal market, liquidity, observable prices and possible transferability restrictions (vesting schedules, lockups, regulatory constraints, etc..). For thinly traded or protocol specific tokens, valuation may require a specialized approach.
Token based earn-outs are increasingly common, and ASC 805 requires contingent consideration to be recognized at fair value at the acquisition date. Consideration should be noted regarding any milestone-triggered vesting, protocol performance metrics, and market price volatility.
In addition, new financial statement presentation and disclosure requirements under ASU 2023-08 require crypto assets to be measured at fair value, including disclosure requirements around rollforwards, methodologies, restrictions, custodial risks, and principal markets. For PPAs, transparency in valuation methods and assumptions are important for financial statement disclosure and potential regulatory filing purposes.
2. Acquihires and Token-Based Incentives
A number of Web3 deals are acquihires, where the primary asset acquired is the development team. In these cases:
This introduces critical accounting judgments: Which portion of the consideration is compensation (i.e., expensed post-deal) versus attributable to goodwill or identifiable assets? How should token-based awards be measured?
3. Customer and Community Relationships
In Web3, “users” are not always “customers” in the traditional sense. Instead, companies may engage:
Evaluating whether these relationships qualify as intangible assets (e.g., customer relationships or assembled workforce) requires a nuanced understanding of tokenomics and protocol governance.
4. IP and Open-Source Technology
Web3 IP is often open-source, which complicates the valuation of developed technology:
Additionally, IP might reside in a non-U.S. foundation or protocol-level entity, even if the target company contributed to it, raising structural and jurisdictional valuation questions.
5. Intangible Ecosystem Assets
Some Web3 companies bring more than just code—they bring network effects:
While these may not always qualify as separately identifiable intangibles, they often support the justification for economic goodwill and can impact how the overall purchase price is allocated.
About CBIZ, Inc.
CBIZ, Inc. is a leading professional services advisor to middle market businesses and organizations nationwide. With unmatched industry knowledge and expertise in accounting, tax, advisory, benefits, insurance, and technology, CBIZ delivers forward-thinking insights and actionable solutions to help clients anticipate what’s next and discover new ways to accelerate growth. CBIZ has more than 10,000 team members across more than 160 locations in 22 major markets coast to coast. CBIZ’s Digital Assets & Blockchain Practice partners with companies operating in blockchain, digital currencies, and decentralized finance (DeFi) to provide specialized services. Whether securing investor confidence, ensuring regulatory compliance, or implementing risk controls, our dedicated professionals offer the insights, tools, and strategies necessary to succeed in the digital asset space.
About Teknos Crypto
At Teknos Associates, we’ve worked with token issuers, DeFi protocols, infrastructure providers, exchanges, and DAOs since the early days of the industry. We understand the nuanced realities of token vesting, off-chain entities, protocol monetization, and the evolving accounting guidance that surrounds them.
Whether you’re:
we can help you navigate ASC 805 with confidence and audit-ready analysis.
Get in Touch
As Web3 deal activity accelerates and scrutiny from the audit community increases, accurate and defensible PPAs are more important than ever. If you’re planning an acquisition—or have recently closed one—reach out to CBIZ and Teknos Crypto to assist you through a defensible valuation for audit purposes.
Teknos Crypto
Casper Schouten
Vice President
cschouten@teknosassociates.com
CBIZ
Joey Ryan
Senior Manager- Digital Assets & Blockchain
joey.ryan@cbiz.com